Goldman Sachs, Citigroup Lead CMBS Sales in Most Deals Since ’07

By Sarah Mulholland -
Sep 7, 2012

Banks are marketing $2.25 billion of
U.S. commercial-mortgage bonds as investors gird for the largest
wave of new deals since the market’s peak five years ago.

Goldman Sachs Group Inc. and Citigroup Inc. (C) are offering
$967 million of securities linked to office buildings, shopping
malls and hotels, according to people familiar with the offering
who asked not to be identified because terms aren’t public. UBS
AG (UBSN) and Barclays Plc are preparing about $1 billion of similar
debt, while Bank of America Corp. (BAC) is offering $280 million of
bonds backed by extended-stay hotel properties.

Lenders are looking to sell as much as $8 billion in
commercial-mortgage backed securities in coming weeks after a
two-month rally, according to Deutsche Bank AG. September
issuance will probably be the biggest monthly volume since sales
revived after coming to a halt amid the 2008 credit seizure,
Deutsche Bank analysts led by Harris Trifon said in a Sept. 5
report.

“As long as the deals are of decent credit quality, there
will be enough demand to absorb the new issuance,” Credit
Suisse Group AG analysts led by Roger Lehman said in a Sept. 5
report.

Top-ranked bonds tied to commercial-property loans are
yielding 143 basis points more than Treasuries, the lowest
spread since at least January 2008, Barclays data show. That’s
down from a more than three-month high of 210 basis points, or
2.1 percentage points, on June 4.

Lenders have arranged about $20.5 billion in commercial-mortgage bonds this year, compared with $28 billion in 2011,
Bloomberg data show. Credit Suisse forecasts as much as $45
billion in 2012 issuance. Sales are down from a record $232
billion in 2007.